Modification of proteins by the addition of a farnesyl groups has been shown to be critical for the function of proteins such as Ras. This facilitates membrane association of Ras which is required for its transforming activity. The modification is catalyzed by protein farnesyltransferase which recognizes the C-terminal CAAX motif of farnesylated proteins. These studies culminated in the development of farnesyltransferase inhibitors which exhibit remarkable ability to block the growth of human tumor cells. Characterization of the effects of these inhibitors, however, has raised the possibility that proteins other than Ras are targets of the inhibitors. In addition, a growing number of G-proteins such as Rheb, RhoB and RhoE have been shown to be farnesylated. These observations lead to a question how many proteins are farnesylated and what their physiological functions are. Our long term objective is to address these questions. Recent determination of the entire sequence of the yeast genome provides a unique opportunity to explore these issues. For the first time in the study of farnesylation, we can obtain a complete picture of farnesylated proteins in an eukaryotic organism. By searching for potentially farnesylated proteins using the yeast protein database, we identified 22 proteins ending with the CAAX motif. Of these, 14 are newly identified proteins or partially characterized proteins. We will take a targeted approach to characterize these proteins. First, we will focus on two G-proteins, Rheb and Rho3. Rheb is of particular interest, since its human counterpart is upregulated in a variety of human tumor cells, and has recently been shown to be farnesylated. We will carry out gene disruption as well as expression of mutant proteins to gain insights into the function of this G-protein. The other is Rho3 which plays a critical role in the polarized growth of yeast cells, apparently through its action on actin cytoskeleton and membrane fusions. We will investigate the significance of farnesylation on the function of Rho3. Finally, a systematic gene disruption study will be carried out to identify new farnesylated proteins which are essential. Our study will be the first full scale attempt to characterize farnesylated proteins in an eukaryotic organism. The results obtained should dramatically widen our understanding of protein farnesylation.